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April 14, 2008

US: Pilgrim’s Pride to reduce chicken production

Pilgrim's Pride today (14 April) announced plans to cut weekly chicken processing at its plants by around 5% later this year amid soaring commodity costs.

Pilgrim’s Pride today (14 April) announced plans to cut weekly chicken processing at its plants by around 5% later this year amid soaring commodity costs.

The reduction began with eggs earlier this month and will take full effect with weekly processing beginning in June and will remain in effect until industry margins return to “more normalized levels”, the US poultry giant said.

The 5% reduction includes the impact of the previously announced closure of the company’s Siler City plant.

Another closure may also be on the cards as the company confirmed it is looking at the possible shut-down of its El Dorado, Arkansas facility. No final decision has yet been made.

Only last month, Pilgrim’s Pride wielded the axe amid a what it termed as a “crisis” in the US poultry industry, with the decision to close a chicken processing complex and six of its 13 distribution centres in the US.

“Soaring feed-ingredient costs fuelled by the federal government’s misguided ethanol policy has created a crisis in our industry, the true effects of which are only just now beginning to be felt by American consumers in the form of higher food prices,” said Clint Rivers, president and CEO. “It is clear that chicken producers of all sizes are feeling the tremendous financial strain from these additional grain costs.”

The company believe the cuts will “strike a better balance” between production and demand and “strengthen” its competitive position.

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